Having owned Pretzel Pete’s since 1997, an independent pretzel company, Karl Brown started thinking about creating a new product that involved using pretzel pieces as toppings.
Through various experiments and research, Brown and company “developed a process to create a pretzel topping involving grinding and then sifting the pretzels before running them though our seasoning process,” he said.
At the Fancy Food Show at the Javits Center in New York City held in mid-July of 2023, it introduced Topzels, a pretzel topping that can be placed on top of ice cream, yogurt or oatmeal. Currently it’s waiting for patent approval; it starts selling wide at the end of July. Its goal is to sell Topzels via independent retailers, bulk sales, food services and online sales.
A specialty pretzel company Pretzel Pete is introducing a new topping product that it hopes will increase revenue and add a new market.
Many customers told Brown that they went to great lengths to crush pretzels on their own as a topping, and now they’re relieved of that task. One Topzels serving, consisting of two tablespoons, contains 50 calories.
Topzels are “grinded down into a smaller size, and sifted into a uniform size, as if being turned into dust and pebbles and then seasoned,” he explained.
Snyder’s of Hanover sells pretzel pieces, which sound like Topzels, but Brown says Snyder’s are larger and of varying sizes.
Topzels can be added on a spoon to top off ice cream, or be used to make a pie crust, or added to a salad. A chocolate company, for example, has inquired about adding it to its chocolate bars.
The first two Topzels on the market will be sweet flavors, cinnamon brown sugar and salted caramel, that appealed to its initial tasters, and after that, it will introduce savory flavors.
But the website Healthline pointed out that pretzels are “high in carbohydrates and low in fat and protein, and contain some other nutrients as well.”
How will Pretzel Pete market Topzels? It “lends itself to social media and our goal is to develop a community of fans that embrace the concept and share their own ideas and suggestions on how to use the products,” Brown stated. Its initial marketing will go live on Instagram, Facebook and Pinterest.
Introducing Topzels enables it to add a new market. It can be placed on the topping shelf, not just snack shelf, alongside ice cream toppings or even salad toppings. An ice cream company with over 250 stores contacted him at the Fancy Food Show to see if it could negotiate a deal to offer Topzels.
Topzels’s success depends on its ability to “execute our product line and make sure we can meet initial demand, get the word out, and focus on independent retailers, online sales and Amazon,” he said.
Brown, who started his career as an international banker, launched Pretzel Pete, out of Hatboro, Pa, a suburb of Philadelphia, with international sales. He was surprised that he found “practically no American products sold in Europe in the late 1990’s” so Pretzel Pete’s could fill that void.
How It Competes Against the Big Boys
How does Pretzel Pete compete against its larger pretzel competitors such as Nabisco, Wise Foods, Utz Quality Foods and Snyder’s of Hanover? Brown, who is 62-years-old, replied, it “cultivates a customer-base that is looking for specialty products that are different from mainstream products.”
He then rattles off a variety of ingredients that he suggested differentiates it from mainstream pretzels. For example, Pretzel Pete is considered a “clean label” product since it avoids using artificial flavors or colors, preservatives and no MSG, relying on local souring of locally-grown wheat and milling locally. Its key ingredients are wheat flour, non-GMO canola oil and malt syrup.
One other secret to Pretzel Pete’s success. About 50% of its overall revenue derives from overseas sales. Much of it stems from Brown’s overseas connections derived, he noted, from “over 30 years of networking,” enabling it to sell to major supermarkets in Germany, such as Rewe an Edeka.
No Big Box Stores
In the U.S. Pretzel Pete’s is sold primarily through independent retailers and distributors. It avoids selling in big box and large supermarkets because “the channels are too expensive for smaller brands such as ourselves,” he said.
Pretzel Pete consists of a staff of 40 employees; most of whom work in manufacturing, as well as administration, shipping, receiving and quality control.
Its most popular products include its seasoned pretzel line such as Honey Mustard & Onion, which comes in broken pieces, nuggets and mini-twist formats, Cinnamon Brown Sugar, and Sour Cream & Chive flavor.
Brown makes the case that pretzels were the original “healthier” alternative to potato chips because they are baked not fried, and they’re lower in calories, about the same as seaweed chips, for example.
Private Equity Interest But No Deals
He’s had private equity companies show interest in investing but has declined. “It’s not a question of money. It’s more about institutional fit and philosophies,” he noted.
What will determine the future success of Pretzel Pete? “Innovation and the ability to seek out new markets,” he said. Continuing to have diversified markets where no one customer constitutes more than 12% of its revenue keeps it nimble, he added. “I’m not beholding to any supermarkets,” he added.